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ABSTRACT
The study has examined the relationship between purchasing negotiation and business performance of made in Nigerian Product. In this research, the survey research design was employed since the study was to ascertain purchasing negotiation and business performance of made-in-Nigeria goods. The population of this study constitutes all distributors of made in Nigeria goods in mile one market Port Harcourt which was unknown. The sample size of this study is judgmental sample of 42 respondents which comprise of distributors of made in Nigeria goods in mile one market Port Harcourt, Rivers State. In this study both the primary and secondary data were used. A self-designed questionnaire on the role of purchasing negotiation and business performance of made in Nigeria goods was used and administered for the collection of data from the respondents. The statistical test used in the analysis of the data collected was the Chi-Square statistical tool. The data collected were processed electronically using Statistical Packages for Social Sciences (SPSS). Findings amongst others revealed that right quality is associated with the performance of made in Nigerian Product and right price is associated with the performance of made in Nigerian Product. Based on the findings of the study, we recommended that manufacturers should ensure product offered is of right quality to enhance performance, manufacturing firms should maintain a stable price that that will compel customers to by their product and services and manufacturers of made in Nigerian products should ensure their product and services are distributed adequately to avoid product scarcity.
TABLE OF CONTENTS
COVER PAGE ii
DECLARATION iii
CERTIFICATION iv
DEDICATION v
ACKNOWLEDGEMENTS vi
ABSTRACT vii
TABLE OF CONTENTS viii
CHAPTER ONE 1
INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF PROBLEM 2
1.3 OBJECTIVE OF THE STUDY 4
1.4 RESEARCH QUESTIONS 4
1.5 RESEARCH HYPOTHESES 5
1.6 SIGNIFICANCE OF THE STUDY 5
1.7 SCOPE OF THE STUDY 6
1.8 LIMITATION OF STUDY 7
1.9 DEFINITION OF TERMS 7
CHAPTER TWO 9
REVIEW OF RELATED LITERATURE 9
2.0 INTRODUCTION 9
2.1 CONCEPTUAL FRAMEWORK 9
2.1.1 Concept of Purchasing Negotiation 10
2.1.2 Dimensions of Purchasing Negotiation 11
2.1.3 Concept of Business Performance 15
2.1.4 Measures of Business Performance 16
2.1.5 Purchasing Negotiation and Business Performance 23
2.2 Theoretical Framework 26
2.2.1 Porter’s Five Forces of Competitive Position Analysis 26
2.3 Review of Related Empirical studies 28
2.4 Summary of Literature Review 30
3.1 INTRODUCTION 32
3.2 RESEARCH DESIGN 32
3.3 POPULATION OF THE STUDY 32
3.4 SAMPLING TECHNIQUES USED 33
3.5 SAMPLE SIZE 33
3.6 SOURCE OF DATA 33
3.6.1 PRIMARY SOURCE (S) OF DATA 34
3.6.2 SECONDARY SOURCE OF DATA 34
3.7 RESEARCH INSTRUMENT FOR DATA COLLECTION 34
3.8 VALIDITY AND RELIABILITY OF INSTRUMENT 35
3.9 TECHNIQUES FOR DATA ANALYSIS 36
CHAPTER FOUR 37
DATA PRESENTATION AND ANALYSIS 37
4.1 INTRODUCTION 37
4.2 PRESENTATION OF QUESTION/ITEMS IN THE QUESTIONNAIRE AND ANALYSIS OF RESPONSES 37
4.3 TESTING OF HYPOTHESES 41
4.4 DISCUSSION FINDINGS 45
CHAPTER FIVE 48
SUMMARY, CONCLUSION AND RECOMMENDATION 48
5.1 SUMMARY 48
5.2 CONCLUSION 48
5.3 RECOMMENDATIONS 49
BIBLIOGRAPHY 50
APPENDIX I 55
APPENDIX II 56
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
As businesses grow more optimistic about opportunities for growth, the pressure is on the to meet ever-higher revenue targets. For these reasons, optimizing sales performance in economy calls for a more rigorous and data-driven approach to foundational sales processes, including strategic planning, territory allocation, resource planning and compensation programming. Performance can be defined as the extent of actual work performed (Richard, 2009). In an era of intensifying competition and fierce negotiations with buyers, tactical selling approaches. The key to sales success is creating value the buyer is not currently considering in their decision making (Silva, 2006).
Business performance has been conceptualized to include both the outcome and behavioral dimensions. Sales outcomes have always been seen by performance oriented sales people as evidence to their behavioral performance. In other words, committed sales people are expected to extend greater efforts on the job there by having a direct effect on job performance (Silva, 2006). Richard (2009) defines performance measures as the vital signs of the organization, which “quantify how well the activities within a process or the outputs of a process achieve a specified goal” (Silva, 2006).
Buyers interact with suppliers for various deals. The success or failure of the deal depends on how effectively they are able to negotiate. To gain maximum advantage from the suppliers, buyers need to keep in mind certain principles of negotiation (Richard, 2009).
Purchase negotiation is a process in which the buyer and suppliers reach an agreement of mutual interest. It is thus all about creating a movement between each other. The objective of the purchasing negotiation process is to ensure the supply of five rights: right product or service at the right price, right time, right location and right quantity. Both the buyer and supplier will have to balance these rights. It is based on the forgoing that the study seeks to examine the relationship between purchasing negotiation and business performance of made in Nigerian Product.
1.2 STATEMENT OF PROBLEM
Nigerian manufacturing sector is assailed by powerful forces, which have been threatening its existence. Factors internal and external impend its survival. Indeed, it is no exaggeration that most of Nigerian manufacturing capacity may cease to exist unless urgent steps are taken to reverse the visible progressive decline, in absolute terms of the manufacturing mix (Sobowale, 1997). Increasing globalization of world trade liberalization has encourage dumping of foreign goods in the country thereby making marketing of home made goods not only difficult but in some cases almost impossible. Over the last decade, Nigeria manufacturers have been enmeshed in a dilemma, borne out of ensuring long-term survival in an atmosphere of ever increasing product cost and ever decreasing consumer purchasing power (Akomolede and Oladele, 2008). While other business functional areas are busy with immediate responsibilities cost reduction, increased productivity, financial discipline. The marketing manager must formulate and implement effective purchasing negotiation strategies (objectives of the purchasing negotiation process-the five rights) that will improve the competitiveness regardless of the turbulent and unpredictable nature of our business environment. Previous studies have also shown that Nigerians have unfavorable attitude toward home made goods (Aire, 1973; Kaegha, Okechukwu & Soyele 1983). It is based on the above that the study seeks to examine the relationship between purchasing negotiation and business performance of made in Nigerian Product.
1.3 OBJECTIVE OF THE STUDY
The main objective of the study is to examine the relationship between purchasing negotiation and business performance of made in Nigerian Product. The specific objectives are as follows:
- To examine the extent to which the right quality will enhance business performance of made in Nigerian Product.
- To examine the relationship between the right price and business performance of made in Nigerian Product.
- To find out the extent to which the right location is associated with business performance of made in Nigerian Product.
1.4 RESEARCH QUESTIONS
In line with the objectives of the study, the following questions will be answered.
- To what extent does the right quality enhances business performance of made in Nigerian Product?
- What the relationship between the right price and business performance is of made in Nigerian Product?
- To what extent does the right location associate with business performance of made in Nigerian Product?
1.5 RESEARCH HYPOTHESES
The following research hypotheses were formulated to guide the researcher:
HO1: There is no significant relationship between right quality or service and business performance of made in Nigerian Product.
HO2: There is no significant relationship between right price and business performance of made in Nigerian Product?
HO3: There is no significant relationship between right location and business performance of made in Nigerian Product?
1.6 SIGNIFICANCE OF THE STUDY
The significance of the study cannot be over emphasized. It can be seen from the problem statement that major difficulties are identified with purchasing negotiation. It is hoped that the study will help marketing managers on the field of study to adopt better purchasing negotiation strategies that will improve the overall business performance for the organizations and help them realize set goals and objectives.
The recommendations made in this study if applied would provide initial steps in major decision on the determination of the present purchasing negotiation strategies that can be used to improve the performance of made in Nigeria goods.
The study will also help the reader to know that the success of an organization especially retail organizations depends on a good purchasing negotiation strategies so that it will present good image and increase their business performance. It will also widen the researcher’s knowledge about purchasing negotiation strategies available and how they can be applied to the business performance.
1.7 SCOPE OF THE STUDY
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves an investigation to ascertain the relationship between purchasing negotiation and business performance of made in Nigeria goods. The dependent variable is business performance measured by sales growth, profit margin and customer retention. While independent variable is purchasing negotiation measure by right product or service, right price and right location.
Geographical Scope: This study is delimited in Port Harcourt Rivers State with references to some selected distributors of made in Nigeria goods in Mile one Market.
Unit of Analysis: The unit of analysis in this research involves distributors of made in Nigeria products in Mile one Market.
1.8 LIMITATION OF STUDY
The study was limited by the following:
The level of frankness in response to questions by the respondents is quite doubtful.
Finance: Accessing fund for the research work was difficult and this limited the quality of research activity.
Time: The time allocated to the research work was not sufficient to give room for further intensive work on the field of study.
Organization Policy: Policies of the organization limited the level of information received. The personnel of the firms were not willing to give information, stating that it was against the organization’s policy.
1.9 DEFINITION OF TERMS
Purchasing Negotiation: Purchase negotiation is a process in which the buyer and suppliers reach an agreement of mutual interest. It is thus all about creating a movement between each other.
Right Price: Price represent the sum or iimount of money or its equivalent for which anything is brought, .old, or offered for sale” price enables a purchaser to compare notations from various vendors, as well as to enable him appraises the relative value offered by each supplier.
Right Location: The right location of delivery is concerned with the place where the purchaser’s orders are ultimately delivered.
Business Performance: It is the extent of actual work performed by an individual or to what extent the actual work is shown by an individual. In an era of intensifying competition and fierce negotiations with buyers,
Profitability: Profitability is the state of yielding financial profit or gain. It is often measured by price to earnings ratio.
Market share: A percentage of total sales volume in a market captured by a brand, product, or company. The portion of a market controlled by a company or product. Market share represents the percentage of an industry or market’s total sales that is earned by a company over a specified time .
Sales Volume: Sales volume is the number of units sold within a reporting period.